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Grosser, Adams and Moon, 2008

Executive summary

Introduction

Today, equal opportunities management and reporting has real significance in corporate social responsibility (CSR) and socially responsible investment (SRI) criteria. Internationally, business, government and non-governmental organisations (NGOs) acknowledge that effective monitoring of equal opportunities and diversity in the workplace is an important part of improved human capital management and equality practice. The drive for transparency and accountability for such issues – including equal opportunities for women – has perhaps never been stronger.

ACCA has commissioned research to investigate public reporting on equal opportunities for women in the workplace among some of the largest employers in three national regulatory environments: the US, Australia and the UK. Although reporting by the leading companies is comparable in all three countries, collectively Australian companies are found to report less information on this issue than their UK and US counterparts. Across all three countries, findings suggest that the recent drive for greater CSR has become a major influence on the reporting of workplace gender issues, although regulation that obliges firms to report to government (in the US and Australia) has also played an important role in driving this agenda.

Background and context

For different reasons, business, government and NGOs internationally have acknowledged the importance of monitoring and managing equal opportunities and diversity effectively, as part of improved human capital management and equalities practice. They have also recognised the importance of accountability for such issues, including equal opportunities for women, and the importance of public reporting. Moreover, equal opportunities management and reporting has acquired additional significance in recent developments in CSR reporting systems and SRI criteria.

This study compares research findings on how a sample of the largest companies in the UK, Australia and the US have publicly reported on equal opportunities for women in the workplace. It examines the different regulatory and voluntary frameworks relating to corporate reporting on gender equality in the workplace in these countries, and analyses the extent to which regulation and other drivers have encouraged and shaped public disclosure and accountability on this issue.

The aims of the research are:

• to ascertain the extent and nature of public reporting on women’s employment issues in a sample of the largest Australian, UK and US companies
• to assess how such reporting of gender issues at the workplace has developed over the last decade in the UK (the country for which we had substantial prior data)
• to evaluate the impact of regulatory and voluntary approaches to equal opportunities reporting in each country
• to evaluate the extent and the ways in which CSR has become a driver of corporate social disclosure (CSD) on gender equality in the workplace
• to recommend steps for improving transparency on this issue.

The research comprises:

• an examination of both mandatory and voluntary reporting frameworks in each country
• content analysis of corporate annual reports and CSR reports for the year ending 1 February 2005 to 31 January 2006 and of company websites from February to June 2006
• in-depth interviews with managers in UK and Australian companies who were responsible for diversity issues with respect to women’s employment and reporting thereon (March–June 2006).

Much of the prior research on corporate accountability for equal opportunities in the UK, where reporting on women’s employment issues is voluntary, has focused on reporting in the annual report. Examining disclosures up until the mid 1990s, this research found that many companies reported their equal opportunity policies, but that there was little reporting of performance information and that summaries of data collected for internal purposes were rarely included. It was concluded that self-regulatory initiatives for disclosure had limited potential for improved accountability and that there was little alternative to regulation if we sought an improvement in accountability, and the opportunity to discover where inequality of opportunity lies.

Although none of the countries studied here has regulation to require public reporting, Australia and the US have different forms of reporting regulation on women’s workplace issues, both of which require regular reporting to government. In contrast, the UK adopts an entirely voluntary approach.

Many analyses explain changing disclosure practices on gender and women’s employment issues, particularly with reference to the changing social, political and economic context. The present study focuses on one recent contextual development, namely the new interest in CSR. CSR has been a relatively long-standing theme in the US, but the UK is now widely regarded as the current leader. Although CSR has also acquired new dynamism in Australia it still lags behind the UK and the US.

Generally, CSR has been associated with a dramatic growth in the reporting of companies’ broad social impacts and responsibilities. Thus, in the last five years, over 90% of the FTSE 100 companies have made some report of their CSR. This reflects the assumption that a responsible company is one that reports its activities. There are now awards for social responsibility reporting, such as the annual ACCA Awards for Sustainability Reporting in a number of countries and regions.

Many explanatory accounts of the new enthusiasm for CSR identify market, civil society and government drivers. Market drivers for CSR arise from the greater inclusion of social criteria in the market decisions of consumers, employees, investors, and business customers. Civil society drivers reflect greater public interest in company behaviour – where, for example, NGOs may be both adversaries and partners of companies – along with media attention and general social expectations of business responsibility. Business associations and CSR coalitions assist companies in meeting these newly articulated expectations. Government drivers range from basic endorsement and support for CSR to ‘soft regulation’ to encourage more responsible business, eg through tax incentives, public procurement criteria. In this context, gender equality and diversity are increasingly defined as key CSR issues and companies that adopt best practice increasingly report on workplace gender issues.

The present study investigates the impacts of these different sorts of driver in explaining the levels and nature of developments in reporting of gender issues in the workplace among the largest employers in three national regulatory environments. The key findings are summarised below.

Reporting practice

We found examples of detailed and extensive performance reporting on gender equality in the workplace in all three countries, as well as much reporting on programmes of actions on this issue.

Most performance reporting covers women’s employment patterns/workplace profile. Reporting is much more limited when it comes to workplace practices such as recruitment, retention, and career development and training.

In many cases, companies report their progress over time on a number of gender issues identified as important to the company (eg women’s representation in management).

Some issues prioritised by civil society and government are reported on (eg equal pay, litigation, sexual harassment and women’s representation in non-traditional jobs), but only by a minority of companies.

Reporting on performance on workplace gender issues among UK companies has improved considerably over the last decade.

In all three countries, reporting is comparable among companies that have adopted best practice but, collectively, Australian companies report less information on this issue than their UK and US counterparts. US companies no longer report significantly more on the employment and advancement of women than UK companies.

The lack of comparable reporting systems and key performance indicators means that opportunities for meaningful comparisons and benchmarking between companies are very limited, even on the issues on which nearly all companies report, such as women’s representation in management.

The problem of non-comparable data is one of the greatest barriers to improved reporting on this issue.

The role of regulation

The regulatory obligation to report to government in Australia has driven monitoring and internal reporting on gender equality in all companies where this was not already a management focus. These developments have facilitated progress and external reporting. The regulation has also acted as a prompt, or catalyst, to alert companies to the business drivers for equal opportunities for women, which we found are also drivers of external reporting. In these ways regulation to report to government has been a driver of external reporting for several of our sample companies.

Data reported to government are sometimes used in public reporting (US and Australia) and the national average data published by government are used as benchmarks to report against by several US companies. The requirement to report to government has enabled civil society organisations and shareholders to call upon companies to increase their transparency on this issue by publishing this data.

Nonetheless, for Australian companies that already focused on this agenda before 1999, regulation to report to government has not been a major driver of reporting to the public.

The role of corporate social responsibility

The socialised market drivers associated with the recent growth of CSR in general are also identified as critical to company action and reporting on gender issues, in particular those relating to current employees, potential recruits and investors.

Likewise, civil society drivers for responsible business behaviour in the workplace were noted as additional motivations for reporting gender issues.

Companies report much more information on gender equality in their CSR reports and on their CSR websites than in their annual reports.

CSR reporting and benchmarking systems (eg the Global Reporting Initiative (GRI), Business in the Community (BiTC) CR Index, Opportunity Now (ON)) now encourage and inform reporting on gender issues.

Company CSR departments and committees, in collaboration with diversity and HR departments, play a central role in identifying stakeholder interests and editing and producing CSR reports.

It appears that CSR has become a major influence on the reporting of workplace gender issues.

Implications and recommendations

Both legislative and non-legislative mechanisms are important in the process of improving equal opportunities monitoring and reporting to the public. Previous studies have recommended mandatory public reporting, and it seems that this approach may well still be necessary. We found that regulation to report to government has played a critical role in driving action and reporting on gender issues in some companies, suggesting that regulation for broader public reporting, if ever enacted, could have a similar affect, as suggested by previous research (eg SIRAN 2005). Given the lack of such regulation in the countries we looked at, our study could not test the efficacy of such legislation, and our interviewees had mixed views on this issue.

Significantly, we also found that market, civil society and government drivers for greater CSR have been very influential with regard to company action and public reporting on gender issues. Not only did our interviewees tell us this, but we found that reporting has improved significantly in the UK (the country for which we had substantial prior data) in the absence of regulation.

Nonetheless, public reporting in all three countries is unsystematic and idiosyncratic, which limits accountability. One of our main findings was that there is an urgent need for clear guidance on best-practice reporting categories and how to measure them, in order to enable meaningful comparisons to be made between companies. We note that regulation to report to government can help in this regard. Where it requires reporting on specific categories of workers (as in the US, for example) these categories can be used in public reports. For benchmarking purposes, CSR benchmarks, such as that run by Opportunity Now in the UK, provide similar guidance. We found a desire in both the UK and Australia for further reporting guidance, and in Australia this was considered necessary with regard to reporting to government, as well as reporting to the public. While the debate as to whether or not to regulate for public reporting on social and environmental issues continues, our study indicates several other important and complementary avenues for improving reporting practice. These are the focus of our recommendations, which are as follows.

Companies should routinely report gender-disaggregated HR data. Reporting their key HR performance indicators with gender breakdowns will have the effect of immediately increasing transparency on gender equality.

Our study has revealed a quite urgent need for standardised reporting KPIs. Governments and/or business organisations should consider producing best-practice guidance for corporate public reporting on workplace gender issues. This would best be developed in collaboration with civil society organisations. It needs to provide consistent, comparable reporting indicators and identify agreed ways of measuring these.

In Australia, the Equal Opportunities for Women in the Workplace Agency (EOWA) should consider helping to improve corporate accountability to the public by commenting on or evaluating company CSR reports on gender equality in the workplace.

Ways need to be found to increase the capacity of civil society organisations to inform companies better about their expectations on gender reporting and thereby to enhance their impact as stakeholders.3 Both government and business could take initiatives in this regard.

Companies may need to anticipate some scepticism about those website reports, updates and newsflashes on gender workplace issues that are not clearly verifiable or audited. We recommend that stakeholders are invited to review and give feedback on gender reporting, and that this feedback is included as part of the external audit of the sustainability report.

CSR and sustainability reporting awards should extend to gender equality/diversity reporting. These could be sponsored by government agencies (such as Australia’s EOWA), business organisations (such as ‘Opportunity Now’ a programme of Business in the Community in the UK), or accounting bodies and CSR organisations (eg ACCA).

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